History : British Leyland, the grand illusion – Part One

Ian Nicholls, AROnline’s historian-in-residence, follows up his excellent run-down of the British Motor Holdings story with a five-part account of the British Leyland years from 1974 to 1977.

In the first part, we set the scene for the company’s 1960s decline – from lofty heights – and its subsequent need for a Government bail-out in the closing days of 1974…

Export or die

AROnline contains many stories of botched decisions, cars that never were and wrong turnings. However, perhaps the real reason why the British-owned motor industry collapsed so rapidly post-1945, was the socio-political environment it had to co-exist in. The UK was a nation deeply divided by class, politics and region. It was country that believed the world owed it a living after the ordeal of WW2, and one that believed that selling was a dirty word.

This story covers in detail the period from 1974 when the British Leyland Motor Corporation went to the Government for financial aid to the end of 1977 when Michael Edwardes had taken over a basket case. There is a lot of politics involved, most of it involving conflicting views within the labour movement on the future of British Leyland.

It is well known that the Labour Government of Clement Atlee exhorted British motor manufacturers to export in order to earn their allocation of steel and this established Jaguar, MG and Triumph in the important North American market. However, this was only ever a small percentage of British car production. Another source of revenue was the British Empire territories.

Excluding the premium brands, volume manufacturers like BMC and Standard served up the public a diet of boring mechanical stodge, which was readily bought by Britons and residents of the colonies. The British motor industry was protected at home by tariffs imposed on foreign imports. National pride was still a vital factor in those years after WW2.

In hindsight this was a complacent attitude to take, the empire was gradually declining, sometimes through violence, and many of the citizens of the newly independent nations resented their former colonial masters. These people felt no obligation to continue to enrich the very nation that only a short time before had treated them as second-class citizens in their own country.

The formation of the European Economic Community in 1958 created a car market in which manufacturers in the member countries were able to compete on equal terms. In the long term, Europe was the place to be selling cars – except the French President, Charles De Gaulle, did not want Britain in Europe.

Setting the scene

Mini – the car that changed everything for BMC in 1959

Then, in August 1959 BMC unveiled the Mini. It may have been small, but its impact on our expectations of what the British motor industry could achieve was enormous. Since 1945 the politicians and analysts had exhorted the British motor industry to produce a volume car that would appeal to export markets in the same way as the Volkswagen Beetle. Virtually all previous attempts had failed, at the manufacturers’ expense, not the politicians, it might be added. Now, in the summer of 1959, it had arrived. However, the Mini was not the car the politicians and analysts had screamed for – it was mechanically complex and expensive to build and perhaps not as reliable as conventional rear-wheel drive cars.

Despite this, demand for the Mini soon led to production easily outstripping the other BMC volume cars. In 1962 BMC produced 216,087 Minis, including some 100,000 for export, which was about the same number of Austin A35/A40s the company was producing in total only five years earlier. The Mini’s appeal transcended class barriers and national borders. It was fun to drive, chic, trendy, fashionable and unique.

In August 1962, BMC announced the Morris 1100. This bigger brother of the Mini soon shot to the top of the sales charts. The opening of CAB2 at Longbridge in 1963 soon resulted in the introduction of an Austin variant and production of both the Mini and ADO16 was ramped up to meet demand.

In 1964 BMC produced 244,359 Minis including 120,930 for export. It also produced 243,538 ADO16s, with 73,418 going for export. That was a grand total of 487,897.

By now well over half of BMC’s weekly car output was of these two Alec Issigonis-designed cars. Whether by accident or design, BMC had created the kind of world cars demanded by export markets. However, in doing so BMC had raised expectations of Britain maintaining a world-class motor industry on this kind of level. The reality was that BMC was punching above its weight and its sales success was more a combination of luck and the loose rein afforded to its Technical Director, Alec Issigonis.

It has been commented before that probably no other company would have allowed Issigonis to develop a car like the Mini. Indeed, although he later blotted his copybook with the ADO17 1800 and the Maxi, the fact remains that in the Mini and ADO16 he created two of Britain’s most popular cars ever. BMC were easily exporting more of these two cars than their rivals at Standard Triumph could build in a year at their Canley and Speke plants.

However, beneath the façade lurked problems. The main one was labour relations. Between 1946 and 1964 44 per cent of all strikes in the motor industry occurred within BMC’s plants, compared to 11 per cent for Ford of Britain. This is generally attributed to BMC retaining the complex piecework system of payment while Ford paid their employees through measured day work.

Piece-work also existed in the factories of Standard-Triumph, Rover and Jaguar. Industrial unrest seemed to increase as the 1960s wore on. Rover was plagued with disputes as they tried to ramp up production of the best selling P6 2000 saloon, one of the defining cars of the 1960s. Over at Jaguar there seems to have been little affection between Sir William Lyons and his workforce. In June 1965 Jaguar experienced a three-week strike when two polishers refused to do a three-minute job that was sent back as ‘below standard.’ Their 60 fellow polishers stopped work and 2500 men were soon idle.

The Union perspective

That said, before one breaks into a rant about ‘bloody minded’ unions and Communist conspiracies, one must remember that British car factories in the 1960s were noisy and dirty squalid places to work, where industrial injuries were part of a day’s work and various ailments could be contracted from inhaling polluted air. They were not the well lit, clinically clean plants of the modern British car industry. Dire working conditions only served to strengthen the trade union movement. In those days of the closed shop you had to be in a trade union to keep your job, but it afforded protection against a management that did not seem to care about your working conditions.

BMC’s brutal dismissal of some 10,000 employees in the autumn of 1966 did little for industrial relations and helped to re-enforce an atmosphere of distrust between managers and workers.

The closed shop and working-class pride also led to inter-union disputes when some employees refused to transfer their membership from one union to another. Until 1972 there were three main unions in the UK motor industry, the Amalgamated Union of Engineering Workers, the Transport and General Workers Union and the National Union of Vehicle Builders, and a host of myriad smaller organisations. The AUEW considered itself the top of the tree. This was the union for skilled workers and they took the view that their skills deserved higher remuneration than the manual workers in the TGWU and NUVB. The TGWU, which absorbed the NUVB in 1972, did its best to get its members earnings on a par with the AUEW.

Prime Minister Harold Wilson had exhorted industry to do away with restrictive practices, but turning that dream into reality was another matter. Trying to persuade the unions to dispense with piecework and accept measured day work within the newly-formed British Leyland proved problematical, as the first attempts were met with an outright rebuttal.

The 1966 Seamen’s Strike had shown the Government how the trade unions could hold the country to ransom and damage the already fragile economy. Confronted with an escalating industrial relations problem, in 1969 Harold Wilson and Barbara Castle drafted the ‘In Place of Strife’ white paper, which advocated legislation to control the power of the trade unions. This was firmly resisted by some members of his cabinet who saw it as an attack on the working class and the plan was abandoned.

Lord Stokes on the Union ‘anarchy’

Leyland Chairman Donald (Lord) Stokes: ‘I cannot believe that this state of anarchy is what the majority of our workers really want.’

The growing labour unrest was tackled by Lord Stokes, the Chairman of British Leyland, in a speech on 25 February 1970: ‘In the first four months of the company’s financial year, strikes and the squeeze have hit the company so hard we have made no profit.

‘The disruptions we are suffering are now so frequent and taking up so much time that the strain on our factory management is becoming intolerable – perhaps that is the aim of the people stirring up trouble. I cannot believe that this state of anarchy is what the majority of our workers really want.

‘We have had in our own plants, and those of our suppliers, walk-outs, go-slows, work-to-rule tactics, working without enthusiasm and other associated activities, very often led by small militant minorities. It is becoming increasingly obvious that the industrial relations system of this country must be based on a framework of law, which could well include ballots impartially administered on a mutually agreed basis.’

‘I do not believe that all our stoppages of work result from genuine grievances. They are such a regular feature of our daily life that they can only be planned and deliberate disruption for its own sake.’

Lord Stokes described the recent spread of industrial disputes, mostly unofficial, as of ‘alarming and chaotic proportions’, and referred to ‘distortion of the truth and insidious coercion’ by the troublemakers.

He also reiterated his plea that a steadily expanding home market was necessary for British car makers to be able to compete in the international markets: ‘This does not seem to have been fully accepted in all responsible circles.’

He warned that, unless there was some halt to the current round of increases and inflation, Britain faced a financial crisis through pricing itself out of overseas markets and raised the spectre of, ‘massive unemployment on a scale only remembered by the older generation in this country.’

Lord Stokes was dismissed as being alarmist, but ultimately he was proven correct. Britain was already well on the way to becoming the sick man of Europe and, within a decade and a half, the country was experiencing the massive unemployment that Stokes had predicted.

Strikes were losing British Leyland sales, draining the company of funds for re-investment and sapping morale. This was the era when the Jaguar XJ6 was rated as the best car in the world, yet the waiting list for the car grew longer and longer as dispute after dispute restricted production. Coventry was Britain’s motor town – in a decade it would be a ghost town.

Heath tried to reel in the Unions

In 1970 the Labour Party was unexpectedly defeated in the General Election by the Conservatives led by Edward Heath. The Heath-led Government did push the Industrial Relations Act 1971 through Parliament ‘to control the growing power of the trade unions.’ The act itself was widely seen as an attack on the working class and was also widely ignored for fear of inflaming industrial unrest on the factory floor even further.

The Industrial Relations Act 1971 also seemed to inflame the deep-rooted divisions within British society. The flashpoint came with the 1972 Miners’ Strike that saw the Heath Government capitulate to the National Union of Mineworkers as the lights went out across Britain.

This again demonstrated the power of the trade union movement to hold the country to ransom.

How did British Leyland compare with its big European rivals in 1972?

BLMC

Fiat

Volkswagen

Renault

Output

1,318,327

1,127,000

1,705,800

2,080,000

Capital investment

£100m

£42m

£142m

£278m

Number of employees

190,800

189,800

200,000

95,000

Output per employee

4.5

8.5

12

11.5

Sales per employee

£6000

£6500

£10,000

N/A

Fixed assets per employee

£2000

£6000

£6000

£3500

BMLC Finance Director John Barber had wanted to shed around 30,000 jobs when the merged company was formed in 1968. This news had leaked out, prompting opposition from the trade unions and resulted in a climb down by Chairman Lord Stokes. Stokes banked everything on selling more vehicles to absorb the surplus labour. Had BLMC managed to lose 30,000 workers and still produce the same number of vehicles in 1972 it would have had an output per employee figure of 7, still not good enough to match its rivals.

BLMC’s sales per employee looked good when compared with Fiat, but one must bear in mind that Fiat’s output consisted of a lot of bread and butter vehicles whereas BLMC had premium products like Jaguar, MG, Rover and Triumph. The picture looks even worse for BLMC when one considers that Fiat, Renault and Volkswagen had a whole host of new-generation, front-wheel drive cars just launched or about to be unveiled to a buying public that would lap them up.

Austin Allegro – BLMC’s car for Europe.

In 1973 Britain joined the European Economic Community. British Leyland launched the Austin Allegro to replace the long running 1100/1300 series and branded it as the car for Europe. Lord Stokes was an advocate of EEC membership. He said that a market of 250 million would be opening for the British motor industry, whereas only an extra 50 million would be offered to British Leyland’s continental competitors. That was the theory…

Although the UK car market had improved somewhat since the low of 1969, in order for British Leyland to take up the slack of its surplus labour force it had to sell and expand into the European market.

In order for BLMC to match Fiat for efficiency, it would have to manufacture 1,621,800 vehicles a year, to match Volkswagen would require annual production of 2,289,600 and to match Renault it would have to produce 2,194,200 vehicles per year.

BLMC and Lord Stokes pushed the Allegro hard in May 1973. Stokes used the Allegro launch as the centre piece of British Leyland’s fifth anniversary celebrations. In a speech at the Savoy Hotel, London, on 15 May, he outlined a massive expansion plan to increase the group’s annual output of cars and trucks from 1,100,000 to 1,500,000. He threw in this comment: ‘We are already actively investigating the possibility of building a major totally integrated car production facility in the UK located separately from our traditional areas of car manufacture.’

For such a plant to be viable the media concluded that it would have to be capable of producing a minimum of 250,000 cars a year.

Lord Stokes concluded with: ‘We are also quite confident that for two years at least we shall be able to generate the cash we need from our own resources. This is the beginning of a very exciting era for British Leyland and I think that our designers, engineers, production men, planners and marketeers are going to provide you with a British motor industry of which you will be very proud.’

The reality was that the big European manufacturers had caught and passed British Leyland’s front-wheel drive technology and the Austin Allegro simply was not up to the job. Moreover, by now British Leyland was rapidly gaining a reputation for dire build quality and appalling reliability.

Again, the reality that British Leyland was trying to punch above its weight was masked by outside events, in this case the ‘Barber Boom’, named after the Chancellor of the Exchequer of the time. The Heath Government pumped money into the economy and the UK car market expanded to record levels. BLMC’s production and profits peaked, but it was not enough. The stop gap Morris Marina fleet car briefly attained its intended production rate of 5000 cars per week, which British Leyland had boasted it would achieve on launch in 1971.

Filmer Paradise claimed BLMC would sell 300,000 Marinas per year

Austin Morris Sales Director Filmer Paradise had made the ludicrous claim that he could sell 300,000 Marinas per year, including a sizable chunk for export, shortly after the cars launch, when records show that peak production was 201,724 in 1971/72. Was he really being serious? Did he really believe that? Even he must have known that the Morris Marina was a rush released parts bin special and it could not compare with the more properly engineered Ford Cortina Mk3 and comparable European rivals.

The ‘Barber Boom’ in fact caught the Austin Morris division of British Leyland out. BLMC had three best sellers, the Mini, ADO16 1100/1300 and the Morris Marina. In 1971 ADO16 production was ended at Cowley to make way for the Marina and, while the Marina benefited from the ‘Barber Boom’, Longbridge could not produce enough Minis and 1100/1300s to satisfy demand, the production shortfall of the ADO16 was some 74,000 cars – hence the need for a separate factory to produce the required number of cars.

Despite the extra money floating around the economy, there were precious few takers for the new Austin Allegro, whose production peaked at 2500 per week and the planned move to a second track and 4000 cars per week output never materialised. There was not enough demand from the UK market, let alone a big surge in sales to Europe that British Leyland had hoped for.

British Leyland had thrown everything into the launch of the Allegro and blown it. The expected seamless transition from the ADO16 to the Allegro never happened. BLMC had replaced a much-loved family favourite with a dud with dire consequences. At launch Austin Morris had boasted of producing 4000 Allegros per week and attaining an eight to ten per cent UK market share, which corresponded in 1972’s car market as 131,022-163,777 sales per year, both matching and exceeding the performance of the ADO16.

The rush to the showrooms never happened…

The plain truth for British Leyland in 1973 was that the Mini was ageing and sales were declining as more modern rivals came on the market. The company claimed that it could sell an extra 150,000 cars per year, but the Morris Marina’s appeal was strictly limited to the British fleet market – for which it was designed – and the firm’s great white hope for expansion into the bigger European market, the Allegro, stumbled. When the time came to replace their ADO16, buyers had no choice but to buy a completely different car and many opted to change brands as well. A Ford Escort, a Volkswagen Golf or maybe something Japanese?

BLMC’s days come to an end in 1974

By 1973, the Japanese invasion was well underway…

The Japanese had been selling cars in Europe since 1966 but it was in the early 1970s that they began to make real headway.

No one single event appears to have triggered off the Japanese invasion, but it seems that they succeeded by word of mouth. Japanese cars lacked the style, panache and heritage of the average British car. What they did have was superb build quality and reliability, and that is what counted.

Outside events again conspired to distort the true picture of the state of the British-owned motor industry, namely the 1973 Oil Crisis sparked off by the October Arab-Israeli Yom Kippur war. In Britain this resulted in car sales dropping by 30 per cent as Lord Stokes was wont to point out but, in reality, this meant a return to the more normal level seen before the ‘Barber Boom’. Indeed, UK car sales in the 1970s, even in what seemed the darkest moments, were all well above the kind of levels seen during the 1960s.

However, with a decline in the appeal of its model range, BLMC found that its market share began an inexorable downturn and the 40 per cent market share it had attained in 1971 was now pie in the sky. The colourful chrome-endowed, badge-engineered BMC models of the 1960s had given way to bland Leyland-ised cars available in a new range of dull colours including the infamous British Leyland beige.

The winter of 1973/74 saw Edward Heath’s Conservative Government have another run-in with the National Union of Mineworkers and, in order to reduce electricity consumption, the Government instigated a three-day week from the beginning of 1974. British Leyland found itself operating at only 60 per cent of its capacity and there was no way it could remain profitable in such circumstances.

The Three-Day Week drained the company’s finances and bear in mind such an event did not affect its continental rivals. In a previous article I have described how various Governments affected the British motor industry, yet omitted the most destructive, which was the Heath Government and its imposition of the Three-Day Week on British industry, which caused enormous financial damage.

Edward Heath called a snap General Election for the end of February 1974 over who really ruled Britain, the Government or the trade unions.

Heath may have claimed he had no issues with the trade unions, but they had plenty of issues with him, the main one being the contentious Industrial Relations Act 1971, which was intended to curb trade union power. The election campaign exposed the deep rooted class divisions within Britain. The Conservatives won more of the popular vote but the Labour Party won more seats. Many voters probably just wanted an end to the three day week and a return to some kind of normality. It was later said that Margaret Thatcher divided Britain. That is palpable nonsense. It was already deeply divided and the evidence is contained within the February 1974 General Election results.

The February 1974 General Election returned the Labour Party under Harold Wilson to power. However, it was not the pragmatic administration of the 1964-70 years, which contained ministers from a broad political spectrum and backgrounds. During its period of opposition the party had moved to the left and was now committed to further nationalisation and employee protection, led by Tony Benn, one of the prime movers behind the formation of British Leyland.

A move to Government ownership

Benn later cited his experiences in government during the 1960s as part of his move to the left. He said: ‘the power of industrialists and bankers to get their way by use of the crudest form of economic pressure, even blackmail, against a Labour Government.’

Benn played a part in drafting Labour’s February 1974 election manifesto which stated: ‘Repeal the Industrial Relations Act as a matter of extreme urgency and then bring in an Employment Protection Act and an Industrial Democracy Act, as agreed in our discussions with the TUC, to increase the control of industry by the people. However, more will be needed if we are to create a new spirit in industry. The British people, both as workers and consumers, must have more control over the powerful private forces that at present dominate our economic life.

‘To this end we shall sustain and expand industrial development and exports and bring about the re-equipment necessary for this purpose through the powers we shall take in a new Industry Act and through the Planning Agreement system which will allow Government to plan with industry more effectively. Wherever we give direct aid to a company out of public funds we shall in return reserve the right to take a share of the ownership of the company. In addition to our plans set out for taking into common ownership land required for development, we shall substantially extend Public Enterprise by taking mineral rights.

‘We shall also take shipbuilding, ship repairing and marine engineering, ports, the manufacture of airframes and aero-engines into public ownership and control. But we shall not confine the extension of the public sector to the loss-making and subsidised industries.

‘We shall also take over profitable sections or individual firms in those industries where a public holding is essential to enable the Government to control prices, stimulate investment, encourage exports, create employment, protect workers and consumers from the activities of irresponsible multi-national companies, and to plan the national economy in the national interest.

‘We shall therefore include in this operation, sections of pharmaceuticals, road haulage, construction, machine tools, in addition to our proposals for North Sea and Celtic Sea oil and gas. Our decision in the field of banking, insurance and building societies is still under consideration. We shall return to public ownership assets and licences hived-off by the present Government, and we shall create a powerful National Enterprise Board with the structure and functions set out in Labour’s Programme 1973.

‘We intend to socialise existing nationalised industries. In consultation with the unions, we shall take steps to make the management of existing nationalised industries more responsible to the workers in the industry and more responsive to their consumers’ needs.’

Far from co-operating with and encouraging the private sector, which employed most Britons, as it had prior to 1970, the Labour Party now seemed openly hostile to it and, indeed, the February 1974 election manifesto saddled the party with an anti-business agenda that it took two decades to shed. The business community were now the bad guys. Everything was now seen in black and white.

The Labour Party managed to achieve a small working majority in a second October 1974 General Election and, in December, British Leyland went to the Government to act as a guarantor for further bank loans.

Born in Bedfordshire but now residing in Norfolk, Ian Nicholls is an ardent BL enthusiast. Currently he owns a Jaguar and two classic Minis. A stalwart of the Norfolk Mini Owners Club for nearly a decade he is an enthusiast for all things Issigonis. A stickler for historical accuracy he has recently performed the marathon task of mining the online newspaper articles for all BMC>MG related stories. Ian is unable to help with technical queries – he pays other people to fix his cars!

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55 Comments

The Wilson government of 1974-76 was probably the most incompetent and reckless government of the last century. Huge increases in wages to buy off the unions, a massive increase in public spending, hikes in income tax, led to inflation of 27 per cent and then the IMF crisis, which saw the country having to beg the IMF for a bailout.
Actually the Callaghan government that followed was better. Callaghan was a realist and pushed Tony Benn to one side and such concepts as industrial democracy disappeared. Also Callaghan managed, to an extent, to reduce inflation, reduce the public deficit and restore some sense about running the country.

Very true Glenn the 1974-6 period was a country in serious trouble as a historical lack of investment in industry and unrealistic wage expectations finally broke the British economy.

What people tend to forget is that in 1971 money was completely removed from the gold standard so from then on Banks could produce any amount of money they wanted (see the 2000’s fake boom and the consequences we all live with.) Then the BoE allowed High Street Banks into the mortgage market – ker-boom, followed by more and more inflation.

Banks don’t loan you other peoples savings, they inflate the loan money into existence. Sounds crazy but its true, that’s why there is a base rate, to destroy the excess cash the Banking system creates. (Today we can’t raise the base rate because of the amount of debt, base rate at 4-6% would swallow up all taxation in repayment alone – this is a huge problem which we are ignoring.)

In the mid 1970’s the notion that you have to destroy money was still not understood by most politicians (apart from one Enoch Powell as it happens) and indeed the Mandarins.

What started the 1970’s stagflation cycles was the Barber boom as Ted Heaths Government overreacted to unemployment hitting 1 million. Then oil shot up. Next problem was Britian’s competitors established themselves in the British market and the native manufacturers could not compete.

No Government could have easily solved the problems. Wilson basically bought time by giving the Miners what they wanted.

With hindsight history is starting to judge Jim Callaghan not as a Union shill, in fact it was his Government that changed the post-war consensus from nanny state to free market and monetarist policies. Maggie Thatcher just cranked up the interest rates (and didn’t understand how monetarism actually works.)

As for British cars and politics the big, ‘what if,’ regards Jim Callaghan’s decision not to call an election in late 1978. If he did and was returned with a stable majority, would North Sea Oil money have been invested in the factories? Would then the UK be as strong as Germany is today?

So the Allegro sold half as well as the ADO16 in a bigger market, while the cheap and cheerless Marina did surprisingly well.
I was surprised how little VW spent on development, they launched the perfectly formed Golf Mk1, Passat, Audi 80 and Audi 100 within three years. If the Allegro was BL’s smoking gun then this was VW’s age of glory.

Tony Benn (or 2nd Viscount Stansgate) position seems pretty far to the left to modern ears, but almost none of his plan was enacted; BL only got nationalised after the Allegro debacle, everything else remained a pipe dream. I struggle to imagine a minister coming out with anything this extreme today.

To Gav in (2), the Golf, Passat, 80 and 100 were the result of Volkswagen buying Auto Union. They had their roots in NSU designs. At a guess, that may be why the figures don’t appear as part of VW R&D.

@Jack Yan: Agreed that Audi 80, 100 and Passat were not related to any VW design. But they had no link with NSU, being designed by the former DKW drawing office lead by a Mercedes man… The Golf was VW’s own effort using the engines designed for the Audi 80 (and 50).

@3 Ford only kept the Escort in production after launch of the Focus to give Halewood something to do until it was handed over to Jaguar for X Type production. It only built cars for the UK market in very small numbers. Amazing that Filmer Paradise thought he could sell 300,000+ Marinas a year. The Cortina never managed this, only coming close with 290,000 twice in 1967 and 1979. To sell that many cars with a dependancy on the home market, the Marina would have needed to be the best seller and sell more than the rest of the top 5 put together!

Paul @6, the Marina’s best year was 1973 when it came third in the sales chart. During its nine year run it sold about a million, making it BL’s best selling car, but this averages out at 120,000 cars a year, about half of what the Cortina was selling.
Given the choice between a Cortina 2000 E and a Marina 1.8 HL, I’d always choose the Cortina as it was better looking, better appointed, quieter, faster and better made. The Marina wasn’t a bad car, it was cheap, spacious and easy to maintain, it was just the Cortina was a better car.

What many don’t realise with the Golf is that VW almost launched a car several years earlier called the EA266 instead and how history would have been different with that! It makes the Allegro look perfectly formed…

VW were obsessed with air cooled engines in the rear, their adverts climaed these were advantageous over other designs, each and every car they designed was basically a Beetle, the fastback, 411, etc VW found themselves in quite a bit of trouble,for sales, especially in the USA The Beetle in the 1970s was not a cult car, until much later, they were seen as something to avoid, VW enthusiasts of today seem to forget that view.

The cars which saved them were FWD and water-cooled obtained from the drawing offices of the German companies they merged with, companies such as Auto Union and NSU, companies which had backed the wonky horse of the Wankel rotary etc

@10 The engine in the VW EA 266 prototype is under the rear seat, similar to the Rover Spiritual,but not sure if it’s transverse or longitudinal. Radiator appears to be at the rear also, giving the slightly odd (to our eyes) appearance. The styling is a mix of 60s VW front and Golf rear. In my view, a well rounded concept, but the management wanted to go conventional, so we got the Golf instead. The rest, as they say, is history

The ES266 has an inline four, tilted by 90 degrees and mounted longitudinally. As it was developed by Porsche (at that time, Porsche was more or less the R&D department of Volkswagen because of their historical roots…), there were intended to be Porsche versions. These would have had a flat eight engine – imagine that in such a small car!
These cars were downright dangerous to drive because of their mid engined layout and semi trailing arm suspension. In addition, they would have been terribly expensive to make and even more so to maintain, with the engine accessible exclusively from underneath the car! At least the EA266 had the longest oil dipstick known, more than one metre long.
Had VW decided to produce that car, they would have been bankrupt in no time.

If the ‘Golf’ had been released as the EA 266 in 1965, where would this have left VW?

Would it have taken off, meaning that VW was in the 1980s the position it is in now?

Or would it have flopped, a German allegro, eventually VW ties up with a Japanese marque (Nissan?), sells a few rebadged Sunnys, a takeover from BMC in the 90s fails to revive it before collapsing in the 2000s.

People talk fondly of the last VW, the Passat, where it is still sold in China in LWB as a Volkewegan P750.

Yes, the Japanese car invasion of the early 70’s really hurt BL. Although my first car was a MINI, my second was a Viva, then I was tempted into Datsun ownership in 1979. The cars looked more modern and attractive and were available new at keen prices. Okay, depreciation and rust were the usual pitfalls, but provided you didn’t hang on to the same car too long, you got away with it.

The BL-Honda collaboration resulting with the Acclaim was a turning point, but too late?

When it comes to prototypes like EA266, EA276 and so on from other carmakers, always wondered whether carmakers could have made money by simply selling their stillborn designs so they find their way into production in places like South America, Asia and the Soviet / Eastern Bloc akin to how Citroen’s Prototype Y was sold to Romania and became the Oltcit / Axel?

Apparently Fwiw, prior to Lada and FSO building Fiat-based cars (ultimately chosen by the Soviets because Italian Communists were gaining power at the time), Ford and Volkswagen were also considered possible options by the Soviets.

As the writer of the article, I will correct Glenn Aylett. It was Harold Wilson who replaced Tony Benn at the DTI with Eric Varley in June 1975.
All will be revealed in part 2.
I suspect that the salesman in Filmer Paradise convinced the BLMC board that they really could sell 300,000 Marina’s and at least 250,000 Allego’s a year.

One point missed is that when they launched he Morris Marina, they dropped from the then separate Morris dealerships the ADO16.

A result about half of the Marina’s sales were in fact former ADO16 customers.

In view of this we can see how little penetration the Marina made in the fleet market and suggests its considerable investment may have been better focused on improving the FWD range reliability and getting an Italian to reskin the Maxi.

Just wanted to check – in the table are the “output per employee” figures correct ? If you divide each company’s output by the number of employees, then (with the exception of Renault) the companies are closer than they appear?

It has been asked before, but what if leyland had been able to steer clear of the disaster that was BMC? Rover/Triumphs sold in fewer numbers, but at a premium. That meant the company didn’t have to match the efficiency of Ford, the Germans or Japanese.

In fact the companies model range made a lot of sense. You had the FWD small Triumphs and the Herald, which covered the lower end of the market. The P5 and P6 occupied the higher end. Triumph did sports cars, and Rover off road vehicles. The only overlap was with the Triumph 2000 and that was easily fixed.

With the Slant 4 coming, money spent on getting the Stag to work properly and an earlier replacement for the P6/2000. Plus a new small Triumph, not to mention the Range Rover and the company could have done well.

However were they exportable as Volvo, BMW, M-Benz and the more expensive Renaults and Fiats/Lancias were very rapidly improving and overtaking the British quality makes at the time of the merger.

While there was investment in the British car industry in terms of increasing output there was no where near enough investment in machine tools and the European manufacturers went 20 years ahead of the UK not just with the car industry but most other industries also.

@18 Ian sorry I think you misunderstand my point, it was not the ending of AD016 production at Cowley I was referring to but the withdrawal of the Morris branded ADO16 from the Nuffield brand dealerships to make way for the Marina.

As a result we have to be aware that the Marina sales performance was certainly as much at the expense of the ADO16 than the target fleet market.

Given the complete failure of the 1800 and Maxi to reach their sales targets, whilst ADO16 was still insufficient to meet demand, that they closed ADO16 production in Cowley to make way for the Marina. This was a double whammy as they had already lost Mini capacity at Cowley to make space for the Maxi. Surely it would have been better to drop the 1800 or Maxi or move them on a single line to release capacity for the Marina.

I am not sure you need to shorten the Maxi wheelbase as its only 63mm longer than the Chrysler Alpine. At the same time if you were asking one of the Italian styling houses to do a comprehensive re-skin, removing 2 or 3 inches from floor pan is not beyond their skills.

Certainly the work required is much less of a challenge than the work involved of re-skinning the Morris Minor, which was the original brief for the Marina.

Re @23 I agree. This is a point I invariably get back to whenever I think about British Leyland, but I’m not sure its quite as clear cut as that. There was political pressure for a merger, for one. And whilst the model range Leyland could offer was easily streamlined into a range comparable or better than that of its rising German competitors, Leyland was at the whim of its shareholders. A sell-out, merger, or collapse is the trademark of the Brish company, and the best that can be said is that Leyland Motor Corporation would have succumbed to a foreign takeover before it collapsed. There is a reason why the German companies have survived, and that is that they have to a large extent been protected from the asset stripping class.

Bingo! Thats the problem with British lack of re-investment in a nutty shell.

‘ A sell-out, merger, or collapse is the trademark of the British company.’

Share dividends of the LSE sucked up more profit than German shareholders and so VW had more money to invest.

I am no Leftist and there are one or two points the old Lefties made that make sense. British shareholders expectations were (and still are to an extent) based on having a huge Empire to exploit and captive global market to sell to.
British raw materials could be bought for nothing then the manufactured goods were sold for whatever high price the retailers and distributors could get away with.

The Empire ended in part because the same greedy gits would not allow Empire free trade.

So the UK got free trade instead with already highly developed countries that had thought of the long game, responsibility and the effects of capital investment.

Has anyone considered an article on the problems the American car industry suffered in the seventies? While they didn’t suffer such a severe decline in fortunes as Britain, two oil crises saw their outdated gas guzzlers fall away to more fuel efficient imported cars, while hastily introduced compacts like the Chevrolet Vega were often terrible. Indeed by 1979 Chrysler, whose range was dominated by outdated V8s ans substandard products like the Dodge Aspen, was bankrupt.

Glenn Aylett brings up a good point. The 1970’s were terrible times in the USA car market and for USA based carmakers as well.
The lack of real USA made small cars with fuel sipping 4 cylinder engines in the early to mid 1970’s just as the oil crises hit. Our ever stricter pollution and safety standards. The end of the post WWII mass production for the world as they fully recovered. The Japanese invasion with much smaller, more fuel efficient, well assembled cars. High inflation and shifts to more robotic assembly led as in the UK with strikes and a lot of poorly made cars. The air cooled VW Beetle was no longer sellable and was no longer for sale in the USA due to its air cooled engine that was near impossible to meet our pollution standard. Other Euro cars like Renault and Fiat as well as the BL and Roots group cars were horribly made due to hostile union workers, were unreliable and no one wanted or could work and were having problems meeting our pollution and safety standards.

There was also the foolish dalliance with the Wankel rotary gas guzzler by Mazda, Citroen NSU etc, the latter almost finished Mazda who were said to have been saved from bankruptcy by altruism from their domestic “competitors” Toyota /Nissan etc.

@ Leon B, in the early seventies with cheap gas and rising living standards, Detroit could sell everything it made and most motorists liked their cars bigger and better, Cadillac introducing an Eldorado with an outrageous 8.2 V8 and most cars having engines of at least four litres.
However, the energy crisis in 1974 caught America out, with sales of Japanese subcompacts rising and hastily introduced American subcompacts being hopeless, but as the crisis eased in 1975, sales of full size cars rose again and Detroit became complacent. Then when the energy crisis of 1979 struck with even more ferocity, Detroit was left with totally uncompetitive products- V8s and badly made compacts- and Chrysler very nearly collapsed and GM and Ford had to sack hundreds of thousands of workers to survive.

My father, who was chairman of a group of BL dealers in the 70s and 80s, always said that Filmer Paradise gave the Japanese their market share. Paradise’s policy of cutting out any small BL dealer (50 units a year) meant that many grabbed a Datsun franchise to stay in business. Because they tended to be the ‘corner garage’ in their community they took their customers with them and thus Datsun had a dealer network handed to them on a plate. It’s alleged that his exact dismissive words were ‘They can fold their tents and fade into the night’.

Required reading in response to many of the comments posted above would be The Leyland Papers by Graham Turner, which posits a view around the time of the Marina launch, followed by British Leyland Chronicle of a Car Crash by Chris Cowin, which takes a present day look back at the events surrounding BL. Suffice to say that it is a very complex multifaceted problem, what some would call the perfect storm.

Darn sure it was, also modern machinery = persistent quality. Don’t think VW made way better cars than BL because of the mythical German work ethic. Wars are won not by bravery and valour, logistics win wars.

Chris Cowin in his book ‘Export Drive’ has put forward a great new theory for the decline of the British motor industry. He argues that the UK based manufacturers banked everything on Britain being granted membership of the Common Market in 1963. BMC built CAB2 at Longbridge to give it capacity to produce 1 million cars. Ford built Halewood, Vauxhall built Ellesmere Port and Triumph built Speke. Britain doubled its capacity to produce cars in order to feed a new market containing 200 million people.
Except in 1963 President de Gaulle of France rejected Britain’s application.
Having stretched their finances in order to expand, the British motor industry found itself producing cars at a lower rate than anticipated. BMC never reached anything like its theoretical capacity.
Chris Cowin reckons that once annual Mini production reached 200,000 it became profitable.
Mini and ADO16 production never reached continental levels because there was no market for them.
EU tariffs made a basic Mini more expensive than a Renault 4. In the 1960’s a Mini may have been cool and chic, but in EU countries they were also expensive.
As a consequence of Britain’s exclusion from the EU, UK production was low and less profitable, and there was less cash floating around for re-investment.

In addition to protection of the French manufacturers, those EU tariffs were a useful source of revenue for the French coffers, a fact not lost on Gen de Gaulle and his double “NON” veto of British admission to the Eu 6, the late Leon Brittan observed and compared standards of living in the partner, the “6” had leap-frogged over the Britain in little more than decade post WW2

British Leyland needed to do on its own in 1968 what the government forced them to do in 1975..Donald Stokes didn’t have the spine to do the complete rationalisation the merger needed and the company suffered as a result

@ Pat, the seventies were probably the closest we came to a socialist society in this country, with crippling taxation of the rich, a big extension of public ownership and subsidies to failing businesses like Chrysler. While this was started with good intentions, it meant many of the wealthiest fled to America, or fiddled their taxes, corporations like British Leyland became expensive lame ducks, and Chrysler pulled out. Ironically it was the unions, who had called for a more socialist society, that brought down this system in the winter of discontent and led to Margaret Thatcher.
Not that I am a massive fan of MT, but something had to be done to rein in the unions, get rid of the supertax and make British Leyland pay its way.

Life was pretty wretched back then so how can anyone expect “peace and harmony” or “everyone lived happily ever after” from the Unions?

I started work in 1973, my wages were a typical 50p per hour! ie £20 a week. I seem to recall a basic Black and Decker drill swallowed weekly wage packet.

The Senior Union leaders were tempered with strong memories of their Depression-era childhoods, the Austerity of WW2, and the failure of the Economy to deliver decent living standards to the masses.

Just about everything you looked at was a wreck, the Rivers running through our Industrial towns and cities were open sewers, stinking of industrial effluent, two-up two-down terraced houses without bathrooms or decent heating, outside toilets at the other end of the garden.

Subject-matter-experts blaming the Red under the Beds Unionss, Do n’t forget the Governments who treated the working Class with contempt.

There is another possible reason why the government (both Tory and then Labour) went crazy with their monetary policies at the time. The mid-1970’s was a politically dangerous time.

If the government did not bail out BL there would have been massive unemployment in the Midlands. Would have taken about two weeks for the car workers and miners to have organized a general strike, power off, country shut down. Then the emergence of a type of, ‘citizen army,’ organized by the same Unions.
Should that confederation of Unions and volunteers have then turned their attention to importers the next step would have been to pressure (or eject) the government to ban imported cars and trucks, as well as about everything else.
Sianara EEC, goodbye financial and trade links to the US.
There was serious potential for civil unrest or even war at the time.

No government wants to let inflation head to 30% but to avoid civil strive and even the situation where the UK would have had to get into bed with the Soviet Union as the only source of finance and trade, well..

Jim Callaghan was the man in charge at the time, Wilson had crawled into a bottle of Gin by the time he walked back into Downing Street in 1974. We all may owe Sunny Jim a debt of gratitude which was not acknowledged. If Heath was still in by 1975 the momentum for revolt likely would have been greater.

@ Pat, this sort of uprising could have been met by some kind of military coup from the shadowy GB 75 organisation which was rumoured in the mid seventies to be plotting to remove Wilson. However, a more British solution occured, Wilson, who was completely worn out and reliant on alchohol and tablets by 1976, stepped down and was replaced by Jim Callaghan, a realist who was faced with the IMF crisis and double digit inflation. Ironically Callaghan and Chancellor Healey’s semi monetarist approach to dealing with the crisis, which was working by 1977, was praised by a normally cynical City and GB 75 was never heard of again as the danger had passed.
Also with regard to car companies in crisis in the seventies, it’s not that well known over here, but Volkswagen nearly went under during the early seventies. Emissions and safety legislation in America had almost killed sales of the Beetle, robbing VW of their biggest export market, and their dependence on aged and crude air cooled cars was killing them in Europe. Had not the German government intervened to save the company in 1973, and funds came through to develop the Golf and the Polo, VW could have been dead.

Looking back through this article, it does appear we’ve returned to the seventies today with a government without a mandate that is determined to govern on its own with some deal with the DUP to nod through the budget. It’s back to 1974 again, with a minority government and a now enfeebled PM( like Wilson back then), and probably an election that will be held in six months time and another weak government with a tiny majority.
Luckily, though, what remains of our car industry is in far better shape than in 1974 and exports are massive, but a bad Brexit could lead to a severe contraction in the industry again.

Talbot chief for Inchcape By Clifford Webb and Philip Robinson Mr George Turnbull, the chairman and managing director of Talbot Motors UK, is to be the new managing director of the Inchape Group. The amnouncement [...]